Have a look at the "Financial" and "Solutions to the financial crisis" labels on this blog for the ramifications of this.

Basically, banks create money through interest bearing loans, which is the cause of the huge world debt problem. Their motivation is to create corporate profit, and they are careless about the ethics of the projects that the loan is used for.

Now that the banks have come cap in hand to government for billions of tax-payers money, it is now clear that Government is the ultimate monetary authority. It does issue the notes and coin anyway. It could also issue money as grants, or loans at zero- or low-interest, but it must be for sound projects that increase our social and environmental security. The chief candidate for this is the vast infrastructure of carbon-free energy that the planet needs.